With increasing frequency, we get asked to help Small Businesses with their search for space. Sometimes these small businesses are start-ups and need our services to help advise them on the process. If you or your family member are looking to start a business and obtain space, there are a couple of questions to walk through to test your readiness to start the search process and raise the confidence in the landlord, seller, and brokers.
The landlord will want to know that you are a low risk tenant, just as in the case of a purchase, the lender will want to know that you are a low risk borrower. How will you plan to enter into the agreements with the other party? Will you have the lease be with a Partnership of Limited Liability Corporation (LLC) or will an LLC make the purchase or hold title? Is the LLC already established, registered with the State and the US Government, with a governing agreement and business bank account.
How much money have you set aside as cushion for the establishment of the business and the ramp up of operations? Will you need to purchase equipment, build inventory, pay for advertising such as signage? How many months can you operate with no revenue before you run out of money?
Have you drafted a business plan yet? If not, we have templates we can walk you through to help you through the process of turning a dream into a concrete plan.
Have you already thought about how much square footage, parking, and rent/mortgage you can afford per month? Also, what geography works best for your idea? Are their existing businesses that will compliment your business idea? Do you have relatively easy access to both labor and customers that you will need to be successful?
You should also be prepared to share two years of tax returns, and several months of bank statements with the landlord (or lender if looking to purchase)? If there are any partners who will be with you in the venture, please prepare them for the same request.There are more questions to think through – we usually schedule a preliminary hour consultation with the entrepreneur or business owner to help them get ready for these questions and many more. Keep us in mind for you or your community member’s business space needs.